Tesla is 'very close' to profitability, Musk says in staff email

Tesla is 'very close' to profitability, Musk says in staff email

Troy Powers
October 2, 2018

According to analysts, the settlement is probably the best thing for both the SEC and Musk and Tesla, because the SEC is showing it can act to enforce change in protecting shareholders, while Musk-removed as chairman-will keep its CEO role at Tesla: a role analysts and Tesla believers see as crucial for the company.

This is the result of an agreement that Elon Musk and Tesla made with the SEC, the Securities Exchange Commission, and is based on an investigation that was conducted where they sought to prove that the owner of Tesla had committed fraud by announcing that he wanted to withdraw Tesla from the stock market and buy all the shares of the company, already having investors ready to support it.

Tesla shares took a steep dive last Friday, plunging 13.90% amidst news of the SEC's lawsuit against the outspoken CEO.

Tesla Motors CEO Elon Musk reveals the Tesla Energy Powerwall Home Battery during an event in Hawthorne, California, U.S., April 30, 2015. The agency also required that the company pay $20 million in penalties to settle separate claims related to Musk's use of social media.

On August 7, Musk told his 22 million Twitter followers that he might take Tesla private at $420 per share, with "funding secured". Achieving those milestones would be a rebuke to may on Wall Street who have insisted that Tesla would need to raise additional funds in the coming months. In addition to appointing an independent chairman, Musk will be ineligible to be re-elected as chairman for three years.

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Steven Peikin, co-director of the SEC's Enforcement Division said the resolution is meant to prevent further market disruption and harm to Tesla investors.

"Funding secured." Later on, the SEC ruled that Musk never went through with his declaration and deal between the company and the Saudi sovereign wealth fund set to foot the bill on the buyout. "The resolution is meant to prevent further market disruption and harm to Tesla's shareholders", said SEC enforcement division co-director Steven Peikin. Tesla shares plummeted 14% on Friday, the biggest drop in nearly five years.

As such, the company was also implicated in Musk's actions.

After filing the lawsuit, SEC officials were anticipating a drawn-out legal battle, but settlement talks started up again late Friday after Musk's attorney Steven Farina sent an email asking to reopen the discussions.